He was joined by David Button from co-sponsor Co-operatives UK who also spoke in support of the Challenge.

Maresa Bossano is a judge on the Buy Better Better Together Challenge and runs the Food Co-ops and Buying Groups strand of the Making Local Food Work programme. Previously, she worked as Five a Day co-ordinator for Hastings and Rother primary care trust for five years, which included setting up and supporting a wide range of community food initiatives, including Hastings farmers’ market, the Community Fruit & Veg Project, cookery groups, healthy lifestyle courses, food growing schemes, school food initiatives, and lots more. She was also seconded to the Food Vision project for a year and helped to develop the Food Vision website with case studies and guidance on initiatives to promote safe, sustainable and nutritious food. Prior to this she worked in fundraising and marketing for the League Against Cruel Sports and the Vegan Society. She did a degree in Environmental Science and Masters in Environment, Development and Policy, and also ran a small vegan organic cake business and worked in several vegetarian restaurants whilst at university. In her spare time she was chair of Hastings Environment Network and enjoys attempting to grow her own vegetables on her allotment

It’s great to see such an increase over recent years in community food initiatives, as co-operative food buying, as a way of buying fresh, locally grown food for less money, is becoming increasingly popular.

In our economy today, more people than ever before are opting out of supermarket shopping in favour of more affordable alternatives to buying fresh produce.

The main principle behind all local food-buying co-operatives, or food co-ops, is that by ordering food in bulk direct from suppliers, groups of people can buy their fresh, locally grown food cheaper.

By pooling their buying power in this way, groups of people can buy good food at a more affordable price, and normally get together to buy fruit and vegetables or wholefoods as perhaps there aren’t any good outlets in their area.

These food co-ops can take the shape of retail stores, bag or box schemes or buying clubs and are run as worker or customer owned businesses or more informal groups.

Now with modern technology, the potential for such community buying is huge as it is so much easier for groups of people to communicate with each other and make plans to buy things together or share resources.

And so, with co-operative buying such a growing trend among consumers, it is fantastic to be working with Co-operatives UK and The Department for Business, Innovation and Skills (BIS) to inspire new models of community buying and support those not yet aware of the difference buying together can make.

The £60k ‘Buy Better Together Challenge’ to recognise and inspire new models for buying together is open to applications and I am very much looking forward to seeing what innovative and inspiring ideas we receive!

A post from Robin Murray, one of the Buy Better Together Challenge judges.  Robin is an industrial economist. Educated at Balliol College, Oxford, and the London School of Economics, he joined the London Business School, where he lectured in Economics, and then moved to the Institute of Development Studies, the national centre for the study and teaching of development at the University of Sussex, where he was a Fellow for 20 years.  During this time he acted as a consultant on industrial and development issues to a wide range of governments.

Collective purchasing was one of the inspirations in the birth of British co-operation in the 19^th century. In the 1820s the London Co-operative and Economical Society began by bulk buying for their members and estimated that it would cut their living costs by a third. Later the co-ops in Swindon and in Chipping Norton were set up initially to bulk buy coal for their members. And there is a sense in which the vision of the Rochdale Pioneers in the 1840s of starting their own shop was a form of buying better together.

Today the web has created new possibilities, for it allows us to ‘aggregate’ our buying power in quite new ways. Music lovers can get a CD they would like to have produced if 5,000 agree to buy it. We could imagine fair traders using a site like Pledge Bank to see if there are enough of us to support the purchase of coffee or (a real case) flip flops directly from a group of producers.  Both these suggest a co-operative version of Groupon where deals are negotiated with service providers if enough people sign up.  

Then there are the growing number of examples of football fans acting together, even co-operatively buying their own clubs. Some of this is organised locally, before and after a match. But the internet has expanded the ability of groups like this to act together. One of the most striking cases was of a football fan who put out a message on the web to see if there were enough people like him who would subscribe £35 to buy and manage a football club. To his astonishment 32,000 subscribed. After on line discussion, they bought Ebbsfleet United for £600,000.

In the past, collective purchasing has been easiest if it is local. And there are still great economies to be reaped if people get together locally – whether setting up a community windmill or establishing a co-operative broadband service as they have done in the market town of Alston in Cumbria. But the internet allows us to use our joint buying power beyond the limits of locality.

Sometimes it is a question of co-ordinating our actions wherever we actually do our shopping – for ethical campaigns like Move Your Money. In others, the things we buy together can be distributed over the web ( like music) via the grid (like electricity) by fibre optics (like phone or broadband services) or existing channels of physical distribution (like the post).  The general principle here is to see if there is an existing distribution network on which a project to buy together can piggy back.

Failing that, some projects have set up their own distribution systems based on local groups. A Canadian group of housing co-ops (themselves a form of joint purchasing) established a food box scheme for their members, and paid one of them in each co-op to act as the part time link and door to door distributor of the boxes. So consumers have to find a means of talking and deciding together, buying together and then distributing what they buy to each household involved.

We can see a broad historical pattern in all this. In the 19^th century there was a European wide movement for collective purchasing through co-ops and friendly societies. In the 20^th century these ties were weakened, particularly in towns and cities. The Western consumer boom was focussed on the individual. The ‘I’ took precedence over the ‘We’. There are signs that this is changing, that the ‘I’ can be enriched with more of the ‘We’. The past thirty years has seen the growth of a new consumer movement, concerned with the quality, impact and ethics of the goods and we buy. People have been rediscovering the advantages of pooling their buying power and their knowledge, just as the co-operators did in the 19^th century. 

These changes pre-dated the internet. But the arrival of the internet has radically changed things. It has made it easier to connect, to assemble, and to share.  The past ten years has seen a growing wave of social innovations in how we co-operate as consumers in the electronic age. New tools are emerging (like local money and the smart card). There are new protocols and rating systems, new types of consumer intelligence and new ways for consumers to relate directly with producers. They are all elements of a less fragmented and more complex consumer economy – one which has the potential to radically shift the balance of power in the market place.

In the past it has been the producers that have aggregated into ever larger units. They have found it better to sell together. Now we are finding ways of co-operating as consumers, and these initiatives that appear to be springing up all over the world are uncovering the hidden value of buying better together.

A Guest Post from Ed Mayo

by edmayo

Ed Mayo is Secretary General of Co-operatives UK, the national trade body that campaigns for co-operation and works to promote, develop and unite co-operative enterprises. He is also a Trustee of The Co-operative College. From 2003 to 2009, he was Chief Executive of the National Consumer Council (NCC), merging this with two other bodies to found a new statutory consumer champion, Consumer Focus, in 2008. Ed Mayo has also co-written a book, ‘Consumer Kids’ with Agnes Nairn on marketing to children, published by Constable in 2009.

In our economy, it probably comes as no surprise that co-operative buying, whether informal with friends or crowd-sourcing online, is a growing trend among consumers.

Our research shows that almost 20% of people are buying co-operatively and with household budgets under such a squeeze, we are finding more interest than ever in co-operative models of business.

But, if only 20% of people are buying together, that means that the majority of people in the country aren’t yet seeing the benefits of co-operative buying.

So I’m really pleased to see our new £60k ‘Buy Better Together Challenge’ – created in partnership with the Department for Business, Innovation and Skills – open to applications today.

Community buying involves groups of individuals combining their buying power to purchase goods or services together and get better deals from shops and other suppliers. It can help businesses spread their overheads and in turn lowers costs for consumers and the ‘Buy Better Together Challenge’ is encouraging more and more people to think collectively to combine their buying power.

Whether it’s local residents pooling their resources to generate renewable energy, carers clubbing together to save money on specialist healthcare equipment for the home or neighbours saving money on quality ethical products by buying them together, there are lots of ways for people to buy together and get a better deal.

Co-operatives UK already has some innovative examples – The Energy Saving Co-operative, True Food Co-operative, Ecohost, to name a few.

We hope this challenge inspires more and more people to see how combining their buying power can help their pocket and their local community.

The challenge is now open to applications from individuals as well as new or existing groups in the public, voluntary or business sectors.

The ‘Buy Better Together Challenge’ £60k pot will go towards training and mentoring for stand out projects and includes £15k for the overall winner.

These will be chosen by our expert panel of judges, which includes Tim Campbell MBE – the winner of the first series of BBC TV’s, The Apprentice and CEO of Bright Ideas Trust – who was on the Queen’s honours list just last week.

Applications are open from today, 21 February 2012, to 15 May 2012. In June, shortlisted applicants will be asked to prepare a detailed business plan for the final stage, aided by a business mentor if they need it. And the overall winner of the prize will be announced in November 2012.

We are delighted to be working in partnership with BIS on the ‘Buy Better Together Challenge’ to recognise and inspire new models for buying together and I am really looking forward to seeing what innovative and inspiring ideas we receive!

Join the conversation on Twitter by using #communitybuy

Only a small fraction of consumers in the UK currently switch their provider for gas, electricity, mortgage, ISA, telephone or broadband – but in other countries such as Australia, the Netherlands, Germany and Belgium, mass switching campaigns have encouraged people to switch.

Which? and 38 Degrees have now launched The Big Switch in the UK by using collective power to get better energy deals. It works by getting consumers interested in cheaper energy prices to register their interest on The Big Switch and Which? nenotiating with energy companies on better energy deals.

For more information, see the article on Which

Do you think a mass switching campaign could work here? Leave your comments at the end of this blog.

 
“Knowledge must come through action,” observed a very wise man about 2,500 years ago. While Sophocles was not referring to the Australian banking sector, the ancient Greeks did know a thing or two about people power.

Although not quite on par with the invention of democracy, the concept of group switching is all about putting power back into the hands of consumers. It has the potential to turn the tables on established relationships between customers and businesses, and in the case of the CHOICE Big Bank Switch, to deliver a competitive jolt to the banking sector in Australia.

Our mission was to use campaigning and social media to build a critical mass of consumers willing to demand a better home loan deal, and then have our partners at One Big Switch challenge the market to meet this demand.

For CHOICE, this was an unprecedented experiment in people power. We simply did not know if it would ultimately succeed.  But from our actions, we have gained some worthwhile knowledge, and delivered some tremendous benefits for consumers.

First, we found overwhelming community support. This was clear in the actions of more than 40,000 consumers who registered for the Big Bank Switch in just two weeks.

Next, we saw a great response from the market, with five financial institutions putting forward offers to the group. Tellingly, all five were small institutions, with none of the ‘big four’ banks who dominate the sector in Australia rising  to the expectations of the 40,000 willing consumers.

Even more encouragingly, all of the offers put forward included genuine group discounts, with one representing the best offer in the market at the time.

2,000 people entered detailed discussions with financial institutions, double the number we initially expected. This is an exceptional outcome, with information submitted by participants suggesting they stand to save an average of $375 a month by accessing an offer through the CHOICE Big Bank Switch. And this does not count the many consumers who would have taken an offer under the campaign to their existing lender to demand a better deal – something we encouraged at every step.

Another thing we learnt along the way is that when you attempt a large-scale market intervention, it will ruffle a few feathers. All the more so when you intervene in a market like the banking sector where consumers have traditionally lacked power.

There were some raised eyebrows and a few raised voices that an independent social enterprise like CHOICE would engage in such a major market intervention. Some also questioned our decision to accept a product-neutral, fixed fee of $250 for each consumer who goes on to switch under the campaign, despite the fact that all revenue will be transparently ring-fenced to cover campaigning costs.

But if we have learnt anything, it is that the future of consumer advocacy will rest on bold actions that shake up established ways of doing business, challenge power structures, and most importantly, deliver tangible benefits for consumers in the process.

Chances are I don’t know you, but I think I can still make some reasonable guesses about your behaviour as a consumer.

I’d venture you almost definitely haven’t switched your gas or electricity supplier in the last 12 months. Actually, you probably haven’t done this in the last five years. I’m also guessing you probably haven’t switched ISA provider; and have almost certainly never moved your current account to another bank. There’s a slim chance you’ve changed your mobile phone network, recently, but that was driven by the need to get your hands on a smart-phone, wasn’t it?

Let me make a few more guesses.

The fact you haven’t switched doesn’t mean you’re sticking with your provider out of an overwhelming sense of loyalty, does it? Or that you’re confident you’ve got the best deal available, right?

I’d even bet you’ve thought about switching in at least one of those markets, in the last year. You perhaps even got as far as looking at what’s available out there. But the thinking didn’t translate into doing because it’s, well, too much hassle.

Does this sound anything like you? The data on switching levels in each of those markets suggests it probably does. If it rings a bell, it doesn’t mean there’s something wrong with you. I think it does mean there’s definitely something wrong with those markets, though.

They were built around the assumption that consumers would continually seek out and move to better deals. The benefits of competition – better value, improved service and innovation – are dependent on us acting in this way.

But it’s a flawed assumption. We don’t actually behave as rational, armchair market analysts. What’s more, we only spend about 28 minutes per day on consumer tasks¹. Most of that time is spent on things we have to buy regularly, such as groceries; or on the things that circumstance means we need right away; or on the things we actually take some interest in buying – holidays, presents, and things relating to our interests.

As long as they’re paid for, boring old utility markets roll on in the background.

However, while we might not be interested in switching, the current state of play should be of concern to us all. When consumer inertia spreads glacier like through these markets, competition between providers gives way to complacency, the benefits that should flow to consumers are nowhere to be seen and new providers who might work hard for your custom are frozen out.

Until now, we’ve had to rely on regulators or government to address these problems. But the remedies in their medicine bag – more or better information, simpler switching processes, or raising awareness of potential savings – make less bad rather than cure.

But here’s an idea: what if the most effective solution came from consumers themselves; and involved them continuing to do, well, not much in these markets? This is where the potential of collective switching comes in.

Social media makes it easy to create a group, aggregate and leverage its demand and synchronise its actions in order to achieve a shared goal. Businesses in the growing daily deals market depend on this ability. It is precisely the dynamic that a collective approach to switching would harness in the consumer interest.

These dynamics also create a context where consumers can be effective in aggregate, without being active individually. As I implied with my predictions, most individuals don’t do much anyway in those markets anyway. For understandable reasons.

Collective switching would offer consumers a new route to better value in those markets. Put simply, it would achieve this by providing consumers with an opportunity to:

1. group with their peers and aggregate individual demand into a co-ordinated block of market share that is committed to acting in concert
2. leverage the group’s combined buying power by offering up the block to providers in a market, in a way that compels those providers to compete against each other for the custom of the group; and, in so doing, secure value for participating consumers that is greater than they are able to achieve by acting in isolation
3. make a synchronised switch once the most competitive offer is identified, whereby the group migrates en masse to the provider who has made the best offer to the group

See the speeches and events section of our website for a presentation I recently gave on how this would work in practice. Let us know what you think too – we’re keen to hear whether people see potential in this.

Minister for Employment Relations, Consumer and Postal Affairs.

As we approach the run up to Christmas and make our pennies stretch even further, spotting a bargain is always a welcome bonus.

But rather than rely on firms to offer us goods and services at a reduced price, you may ask yourself “What can we do, as consumers, to enjoy similar savings?”

Let’s take a look at successful UK firms – because of their economies of scale they enjoy bulk buying power and can offer goods and services at a discounted price and with more convenience.

And SMEs, which don’t enjoy the benefits of scale that big companies do, often club together to buy goods and services at a discount.

This is great for UK plc but what about other products and services that you might buy regularly within your own community?

I’d like you to take a minute and think about how many other people in your area are buying similar products to you every month. Things like fuel, groceries, leisure activities or energy. It’s probably a lot more than we realise.

But how can we harness this pool of people and turn it to our advantage?

Well today, as part of our consumer empowerment strategy, I have launched the Buy Better Together Challenge, in association with Co-operatives UK, which is looking for the best ideas and proposals for community buying.

The £60,000 prize fund is set to inspire new models of community buying from a wide variety of organisations, including community groups and businesses.

We have also produced the Guide and this interactive microsite to help anyone considering how to reap the benefits of group buying to negotiate a better deal.  We’re pleased that we’ve been able to link up with moneysavingexpert to help spread the word further.

And it’s not just a benefit in monetary terms. It also has a wider potential for the community in terms of volunteering opportunities, IT or business skills development and environmental benefits, for instance from fewer delivery vehicles.

In turn the best and most innovative businesses that are able to supply communities in a new way will be rewarded with repeat custom, which will ultimately benefit the local and national economy.

The website will also enable everyone to come together to exchange thoughts and ideas to develop our learning and knowledge around community buying.

In particular, using technology and the internet will bring similar groups together to collaborate on an efficient and larger scale.

The guide will walk people through setting up a scheme, planning the business, organising the group and managing the buying process.

And there are case studies in the guide to show how people are already running these schemes.

Take for example Allen Valleys Oil Buying Co-operative in the south of Northumberland, which was set up earlier this year to counter rocketing fuel prices.

They are able to buy different types of fuel at discounted prices to benefit local residents and businesses. It is this sort of collaboration that we want to see more of so that consumers can get better value, convenience and quality.

I do hope you take the time to read the guide and get involved with the website.

You can register your interest in the Buy Better Together Challenge now on the BIS or Co-operatives UK website. I am excited to see the creative ideas that will be put forward and the benefits that they will bring to our communities.

I’m really passionate about this and I wanted this site to be a useful tool for communities, rather than just a dry Government document.